By your explanation it's not called an instance, but a reference of an object. An instance of a class is called an object. I think your question is: "What is the difference of an object and a reference variable?" I'll try to explain it with some examples:
Foo f;
I just declared a reference variable. This is not an object but only a reference that refers to an object.
f = new Foo();
Now I created a new object and assigned it to the f reference variable so every time I do something to f I refer to the Foo object. Like when I call f.Name = "MyFoo"; I refer to the foo object.
Foo otherFoo;
Now I declare another reference variable.
otherFoo = f;
What we have here now is having ONE object in the memory but TWO reference variables refering to the same object.
f.IsFoo = true;
bool isotherFooFoo = otherFoo.IsFoo;
This last line will return true because we changed the IsFoo property to true and f and otherFoo reffer to the same object.
I hope that explains you everything. :)